The Fresh Market Inc (TFM) Earnings: An Early Look

Earnings season is winding down, with most companies already having reported their quarterly results. But there are still some companies left to report, and The Fresh Market Inc (NASDAQ:TFM) is about to release its quarterly earnings report. The key to making smart investment decisions with stocks releasing their quarter reports is to anticipate how they’ll do before they announce results, leaving you fully prepared to respond quickly to whatever inevitable surprises arise. That way, you’ll be less likely to make an uninformed knee-jerk reaction to news that turns out to be exactly the wrong move.

Fresh Market has emerged as part of the trend toward organic and healthy food offerings among grocery retailers. But the company has faced some recent challenges as it tries to differentiate itself from the leaders in the industry. Let’s take an early look at what’s been happening with Fresh Market Inc (NASDAQ:TFM) over the past quarter and what we’re likely to see in its quarterly report on Wednesday.

Stats on Fresh Market

Analyst EPS Estimate	$0.45
Change From Year-Ago EPS	18%
Revenue Estimate	$380 million
Change From Year-Ago Revenue	19%
Earnings Beats in Past 4 Quarters	2

Source: Yahoo! Finance.

Will Fresh Market get healthier this quarter?
Analysts have remained secure in their earnings estimates for Fresh Market Inc (NASDAQ:TFM) over the past few months, calling for continued strong net income and revenue growth throughout the coming year. Yet the stock hasn’t performed well lately, having lost 13% since early December after an even more precipitous drop earlier last fall.

The traditional grocery business is notorious for its low profit margins. But Fresh Market has taken a page from larger rival Whole Foods by focusing on high-end premium food offerings that command more pricing pressure than traditional grocery items. With just over a tenth the revenue that Whole Foods generates, Fresh Market has a lot more room to run in its growth trajectory if it’s successful in establishing itself as a viable alternative in the niche.

But last quarter, Fresh Market raised some questions about just how steep that growth trajectory might be. Same-store sales growth fell from above 8% in previous quarters to just 5.6% in the third quarter, which sent the stock plunging after the report.

Fresh Market Inc (NASDAQ:TFM)’s expansion plans will have it facing crunch time among investors in 2013. Having just opened its first store in California late last year, Fresh Market plans to build more stores there as well as moving into Texas in the coming year. With Texas being the home state of Whole Foods, it’ll be interesting to see how the concept plays out there. Moreover, SUPERVALU INC. (NYSE:SVU)‘s big move to sell some of its store chains to private-equity firm Cerberus opens the door to further consolidation activity in the space, perhaps making Fresh Market a possible buyout target in the future.

In its coming report, watch for Fresh Market to give further details on its new store plans. In the long run, they’ll be crucial in determining whether Fresh Market can accelerate its growth or will fizzle out before reaching its full potential.

The article Fresh Market Earnings: An Early Look originally appeared on Fool.com.

Fool contributor Dan Caplinger has no position in any stocks mentioned. You can follow him on Twitter @DanCaplinger. The Motley Fool recommends The Fresh Market and Whole Foods Market (NASDAQ:WFM). The Motley Fool owns shares of SUPERVALU and Whole Foods Market.

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